The SEC alleges that Richard Dalton and Universal Consulting Resources LLC (UCR) raised approximately $17 million from investors for two fraudulent offerings. The programs were generally referred to as the “Trading Program” and the…

Last month an arbitration panel ordered the investment firm USB financial to pay over $80 million in consequential investments to Kajeet, Inc., a company who markets cellphones for kids. Kajeet’s award fell short of the $110 million…

A Texas couple got some great news last week from the FINRA
arbitration panel that ruled on their claim.
The panel ruled that the Raymond James Financial Inc. and
broker Larry Milton must buy back some $925,000 worth of auction…

Inside Sarbanes Oxley

If your organization isn’t already offering incentives to ferret out inappropriate behaviors, the new Dodd-Frank Act and whistleblowing rewards just might (and could make your company the next public spectacle).
Deloitte’s…

The department painstakingly went through its inventory of SOX controls to determine which ones could be assessed just by analyzing data in company systems. Then data-analytic scripts were written to allow exceptions to be found. Now, for…

Ever since stock-listing requirements prompted many US companies to name an independent director to serve as the chairman, lead director, or presiding director of the board, these companies have been grappling with what, exactly, this board…

Summary of the Proposed Amendments to Form ADV and Investment Advisers Act Rule

On May 20, 2015, the SEC issued proposed amendments to Form ADV and the Investment Advisers Act rules. In the release, the SEC proposed amendments to Form ADV that would require advisers to disclose additional information, such as information…

Back in March, I wrote about proposed revisions to Regulation A, commonly known as “Regulation A+”, which were designed to implement Section 401 of the Jumpstart Our Business Startups Act (JOBS Act). Since then, the SEC issued its…

When advising startup clients, I frequently recommend that they subject the shares issued to their founders (as well as those issued to any equity-compensated employees and contractors) to a vesting schedule. This conversation often leads the…

The 10b-5 Daily

Cornerstone Research (in conjunction with the Stanford Securities Class Action Clearinghouse) has issued its 2015 midyear report on securities class action filings. The findings for the first half of 2015 include: (1) There were 85 new…

The U.S. Court of Appeals for the District of Columbia only hears a small number of securities cases, which means that it is often playing catch-up on the relevant legal standards. In In re Harman Int’l Industries, Inc. Sec.…

Securities class actions rarely go to trial. When they do, as in the Household International case where the plaintiffs won a $2.46 billion verdict, they make the news. But it is axiomatic that big verdicts lead to big…

U.S. Government Appeals Landmark Insider Trading Decision to the Supreme Court

This guest post was authored by our colleague Rimma Tsvasman, an associate in the firm’s Litigation Department in New York. Rimma concentrates her practice on corporate and securities transactions, investment management…

This post was co-authored by David F. Herman, an associate in Montgomery McCracken’s Litigation Department. He serves an editor of the firm’s Data Privacy Alert blog, which focuses on data privacy and cybersecurity issues. David…

This guest post was authored by Mara Smith, a summer associate with Montgomery McCracken. On Friday, the Seventh Circuit upheld what it determined to be a substantively reasonable sentence for billionaire Ty Warner, the creator of Beanie…

Investment Fraud Attorney Blog

As recently noted in a press release, The Securities and Exchange Commission (“SEC”) announced a whistleblower award of more than $3 million to a company insider whose information helped the SEC crack a complex fraud. …

The Securities and Exchange Commission (“SEC”) recently charged a former stockbroker in Pennsylvania with conducting a Ponzi scheme and stealing investor money to purchase a condominium in Florida and pay for his own vacations and…

SEC Charges Investment Advisor with Placing 17 million in Client funds in Penny Stock Companies in which he Allegedly has Interest

The Securities and Exchange Commission recently announced fraud charges against a Massachusetts-based investment advisory firm and its owner for placing more than $17 million in client assets into four financially troubled Canadian penny…

The Supreme Court of New Jersey recently held that a plaintiff who reports conduct as part of his or her job is entitled to the whistle-blowing protections afforded under the Conscientious Employee Protection Act (CEPA). In light of the…

For supervisors and their reports, the requirement for conducting performance reviews has been an annual rite that both sides have endured at sufferance. The quality of the process and its purpose is rarely evaluated or questioned. …

On July 15, 2015, the Department of Labor (DOL) published guidance on the increasing number of misclassified workers. The agency’s broad interpretation of “employee” under the Fair Labor Standards Act (FLSA) suggests that…

On July 13, the Consumer Financial Protection Bureau (CFPB) Director Richard Cordray delivered remarks at the White House Conference on Aging and signaled the CFPB’s plans to issue an advisory later in 2015 to assist financial…

In early June 2015, FinCEN assessed a civil money penalty on the Tinian Dynasty Hotel & Casino, located in the Northern Mariana Islands, an archipelago to the east of the Philippines (don’t feel bad if you click here to learn a…

Last week, federal prosecutors in Georgia filed papers supporting the local probation office’s U.S. Sentencing Guidelines calculation calling for a sentence of life in prison for Stewart Parnell, the one-time CEO of Peanut Corporation…

According to Andrew Ackerman and Joann Lublin of the Wall Street Journal, the Securities and Exchange Commission is “poised to complete a rule requiring companies to disclose the pay gap between chief executives and…

A 17-year veteran advisor recently agreed to a lifetime ban for falsifying the signatures of a client on 10 documents transferring money out of the client’s accounts over a period of two months. Part of this transfer also involved 17…

In a recent blog by Chris Pogue (a digital forensic expert), he highlighted a handful of considerations for firms both pre and post data breach. After all, the issue is not really whether you will suffer a breach, but when and how bad will it…

This article was originally posted on Stock Market Loss
On April 3, 2015, we mentioned that Thomas J. Buck, who was Merrill Lynch’s top financial adviser in Indiana by assets under management –reportedly $1.3 billion – had…

This article was originally posted on Stock Market Loss
In our May 18th post, we discussed stockbrokers (sales persons who purportedly dispense advice only in conjunction with selling investment products) and investment advisors (who give…

This article was originally posted on Stock Market Loss
We continue to see lots of activity involving unsuitable sales of non-traded Real Estate Investment Trusts (“non-traded REITs”). If you’re a retail customer who was…

On July 17, 2015, the SEC announced a whistleblower award of over $3 million to a company insider who provided information that “helped the SEC crack a complex fraud.” This payout represents the third highest award under the…

In United States v. Salman, the Ninth Circuit recently held that a remote tippee could be liable for insider trading in the absence of any “personal benefit” to the insider/tipper where the insider had a close personal…

You Can’t Cover Up Fraud with TARP Funds: US Government Sues Bank President’s Estate

On July 1, 2015, the United States for the District of Columbia sued the estate and trusts of the late Layton P. Stuart – the former owner of One Financial Corporation and its subsidiary One Bank & Trust– and the Read More

You may use Flipboard as a nifty way to organize news and media in which you have an interest. (If you don’t use Flipboard, try it). For mysterious reasons, Flipboard decided to do a “spotlight” on me as a…

On July 14, 2015, the Securities and Exchange Commission (“SEC”) charged 34 defendants for their alleged involvement in fraudulent schemes to manipulate microcap stock trading. The list of defendants includes six firms that…

The Securities Edge

Posted By: Robert B. Lamm
Governance wonks can rest easy. In fact, we can all go home and think about another career. The reason? CalSTRS – California State Teachers’ Retirement System – has issued a “fact sheet”…

Posted By: Robert B. Lamm
For those who think nothing ever gets done in Washington, last week must have been a challenge. From outward appearances, both the SEC and the PCAOB seem to be working overtime, possibly in order to ruin our holiday…

A dispatch from the front lines (with SEC Chair White telling us to wave the white flag)…

Posted By: Robert B. Lamm
Last week I attended the National Conference of the Society of Corporate Secretaries and Governance Professionals in Chicago. It was a great conference – wonderful, substantive programs and a chance to catch up…

In interpreting an exploration option agreement, a recent court of appeal decision recognized the inherent challenges faced by junior exploration companies, in both good times and bad. See our Dentons Insight to learn more: Caveat…

On June 17, 2015 the SEC announced fraud charges against Interinvest and Hans Peter Black for channeling more than $17,000,000.00 of their clients’ assets into four financially troubled Canadian penny stock companies in which they…

Raymond James, Wells Fargo and LPL Financial Ordered to Pay More Than $30,000,000.00 in Restitution to Retirement Accounts and Charities Which Were Overcharged for Mutual Fund

On Monday, July 6, 2015 the Financial Industry Regulatory Authority (FINRA) announced that Wells Fargo, Raymond James and LPL Financial were ordered to pay $15,000,000.00, $8.7 Million, and $6.3 Million Dollars, respectively in restitution,…

The New York State Department of Financial Services - Life Insurance Resource Center

The New York State Department of Financial Services maintains a Life Insurance Resource Center on its website designed to inform New York State residents of the various life insurance-related products being sold in New York State. These…

Months after shelving a financial advisor “bonus” disclosure rule that it previously had filed with the SEC, FINRA has proposed a revised bonus disclosure rule that emphasizes educating investors about questions potentially to ask…

According to recent reports, FINRA has sought to delay the implementation of a new rule that would provide greater clarity for investors in non-traded REITs as to the value of their shares. The proposed rule filing would require firms…

Please join us for the Pacific Rim M&A Institute’s next session. This quarter’s program features Port of Seattle CEO, Ted J. Fick, who will discuss how the Port contributes to our region’s economy. We look forward to…

I recently had the chance to sit down with BJ Lackland, the CEO of Lighter Capital, to talk about life, revenue loans, and Lighter Capital. Below is a transcript of most of our talk. – JW: BJ, what’s the first … Continue…

How Are You Planning to Fund Your Big Idea in 2015? Due to cheaper tools, the cost of getting a startup off the ground has markedly decreased over the past dozen or so years. However, despite lower costs, it can … Continue reading…

FINRA recently underwent some changes to its BrokerCheck website. For those that do not know, BrokerCheck is the online repository in which the Financial Industry Regulatory Authority (FINRA) discloses certain information about stock…

FINRA recently reported its February 2011 arbitration statistics. For the two-month period ended February 28, 2011, 837 claims were filed. This represents a decrease of 9% as compared to the number of cases filed in February 2010 (918).
The…

In Scottsdale, J'Sean Claude Butierries pleaded guilty to defrauding investors out of hundreds of thousands of dollars. He allegedly used the ill-gotten gains to buy himself luxury items like a $195,000 Audi and cosmetic surgery for his wife…

Vinay Kumar Nevatia, of Palo Alto, has been charged by the U.S. Securities and Exchange Commission for allegedly reselling almost $900,000 stock shares of an off-shore company, CSS Technologies (Mauritius) Limited, already owned by eight…

Jeffrey McClure, a former employee of Wells Fargo Advisors and an affiliated bank in California, was recently barred from the securities industry after stealing almost $89,000 from an elderly customer.
Between December 2012 and August 2014,…

TRACE Blog

It’s been quite a year in the world of anti-bribery compliance. Here at TRACE, we’ve compiled our “Top 10 List” based on your poll results over the last twelve months. Read through the list below for a look…

For the final day of our holiday promotion, TRACE is offering one company complimentary access to our online training for one year. Our system administrators will set the winner up with a branded platform to train up to 500…

Supplement your training program with a customized, in-person training session conducted by one of our experienced FCPA attorneys. This half-day session will enable one lucky company to train their employees on anti-bribery regulations and…

Originally posted on America's Markets:Fast-growing money management firm F-Squared has agreed to pay $35 million and admit wrongdoing for defrauding investors with false ads about the firm’s flagship product, a federal regulator…

Today, the Securities and Exchange Commission (SEC) issued a Press Release announcing that as a result of its micro-cap fraud-fighting initiative they named “Operation Shell-Expel”, they suspended trading in 255 dormant shell…

Florida Securities Fraud Attorney Blog

Fort Lauderdale police agencies have technology to read license plates. Once read, the plates are matched against outstanding traffic tickets. In addition, the owner’s name is matched against outstanding criminal warrants. At what…

The History Channel‘s broadcast of "Weather Warfare" focused international interest in The State of the Nation’s demand that the International Criminal Court begin a criminal investigation into what I have dubbed "The…

As noted in an earlier post, on the April 30, 2014, shares of Lihua International, Inc. (NASDAQ: LIWA) collapsed over 50% amid allegations that a senior manager may have become the subject of an action by Chinese law enforcement. …

On April 30, 2014, the Board of Directors of Lihua International, Inc. (“Lihua”) (NASDAQ: LIWA) issued a press release after the Company’s stock price collapsed by over 50% amid allegations that the Company’s CEO and…

On April 30, 2014, the Board of Directors of Lihua International, Inc. (“Lihua”) (NASDAQ: LIWA) issued a press release after the Company’s stock price collapsed by over 50% amid allegations that the Company’s CEO and…

As noted in an earlier post, on the April 30, 2014, shares of Lihua International, Inc. (NASDAQ: LIWA) collapsed over 50% amid allegations that a senior manager may have become the subject of an action by Chinese law enforcement. …

On April 30, 2014, the Board of Directors of Lihua International, Inc. (“Lihua”) (NASDAQ: LIWA) issued a press release after the Company’s stock price collapsed by over 50% amid allegations that the Company’s CEO and…

On April 30, 2014, the Board of Directors of Lihua International, Inc. (“Lihua”) (NASDAQ: LIWA) issued a press release after the Company’s stock price collapsed by over 50% amid allegations that the Company’s CEO and…

Welcome to Canada! Using Regulation A+ to List on the CSE, TSX or TSX Venture Exchange

By Alixe Cormick Using Regulation A in conjunction with listing on the CSE, TSX, or TSX Venture Exchange in Canada is an option that will become more practical for United States (US) based issuers once proposed changes to Regulation A…

By Alixe Cormick Asking what the “all-in-costs” are for preparing an offering memorandum (an OM) is like asking how much it costs to build a house. A new 4,000 square foot custom-built house in West Vancouver, BC will cost more…

Where You Can Find the Proposed Canadian Equity Crowdfunding Rules and Form

By Alixe Cormick In Canada, two crowdfunding specific exemption proposals are out for public comment: a start-up crowdfunding exemption and an integrated crowdfunding exemption. Six provinces (including Saskatchewan) are…

STIFEL NICOLAUS AND CENTURY SECURITIES CONSENT TO FINES OVER IMPROPER SALES OF LEVERAGED AND INVERSE ETFS

According to a recent news release, the Financial Industry Regulatory Authority (FINRA) has fined Stifel, Nicolaus & Company, Incorporated and an affiliate $550,000 ordered them to pay approximately $475,000 in restitution to 65 customers…

Banking giant J. P. Morgan Chase has reached a deal with federal prosecutors to avoid criminal prosecution for its role in the Bernard Madoff Ponzi scheme. According to the prosecutors, J. P. Morgan, which had custody of Madoff accounts,…

Each year, the Financial Industry Regulatory Authority (FINRA) publishes a letter to the financial services industry identifying its regulatory and examination priorities. FINRA is the industry's "self-regulatory organization," which is…

Click on the video below to see Robert Herskovits’ appearance on Side Bar with Bill Singer, a show produced by Reuters. Robert speaks about issues concerning the Protocol for broker recruiting and transition issues faced by registered…

FINRA recently entered into a settlement with Gar Wood Securities LLC (the "AWC") concerning allegations that Gar Wood facilitated the sale of restricted securities in violation of the Section 5 of the 1933 Act, and the Firm failed to…

At long last, the SEC has approved general solicitation in 506 offerings. I have previously blogged on the subject here and here. It seems each stakeholder group is claiming it as their own victory. Hedge funds, crowdfunders,…

This week, Fox Business News contributor Tobin Smith was terminated because he violated their policy that “no contributor to FBN [Fox Business Network], nor his/her firm, and/or family members are allowed to accept financial…

This, of course, is a misleading question. The answer is never. In case you need some law to back up that conclusion, take a look at the recent case of Robert J. Vitale. Mr. Vitale was the subject of an SEC enforcement…

The Lebrecht Group, APLC Blog

At long last, the SEC has approved general solicitation in 506 offerings. I have previously blogged on the subject here and here. It seems each stakeholder group is claiming it as their own victory. Hedge funds, crowdfunders,…

This week, Fox Business News contributor Tobin Smith was terminated because he violated their policy that “no contributor to FBN [Fox Business Network], nor his/her firm, and/or family members are allowed to accept financial…

This, of course, is a misleading question. The answer is never. In case you need some law to back up that conclusion, take a look at the recent case of Robert J. Vitale. Mr. Vitale was the subject of an SEC enforcement…

Hey folks -- I'm getting ready to head down to the RTP area for the annual CED Venture Conference. This year it is in downtown Raleigh, instead of Pinehurst, and looks to be bigger and better than ever.
So, if anyone happens to be in the…

Hedge fund operators (politely called “Investment Managers” on Wall Street) can make the plaintiffs’ bar look like expensively dressed social workers. The hedge fund industry is estimated to be a $2.5 trillion industry.

The PSLRA Nugget

Please update your bookmarks, as the PSLRA Nugget is moving to a new easier to remember website address. Also if you are getting this by email, and you would like to continue getting it that way, you just need to go to

OK, you know who you are. The serial page extension requesters. But Judge, we have to have 100 pages to explain it. I know, I know, we've all done it. And yes I agree sometimes it's necessary. But District Judge Joy Flowers Conti…

Everyone knows about the freaky fireball that plummeted through the Texas sky last weekend. In an unrelated development, a fireball suddenly appeared in the skies over Proxyland on Friday. That one, however, has been identified: it’s Title…

Susan Antilla of Bloomberg news published a recent column revisiting the question of the continued viability of state securities regulators’ enforcement authority. I spoke to Susan about my research on the issue and I am quoted in…

Susan Antilla of Bloomberg news published a recent column revisiting the question of the continued viability of state securities regulators’ enforcement authority. I spoke to Susan about my research on the issue…